One of China's leading manufacturers of bioplastic products, Wuhan Huali Environment Protection Science Technology Co. Ltd., has received US$13.5 million of venture capital funding from DT Capital Partners.

At last week's signing ceremony, Huali Chairman Zhang Xianbing projected 2009 sales to reach 120 million yuan (US$17.6 million), according to the company's Web site.

The 9-year-old company in Wuhan, Hubei province, touts its annual capacity of 40,000 metric tons of biodegradable plastarch materials (PSM), which meet international standards such as EN 13432 and ASTM D6400. Its product portfolio also includes finished products and processing equipment.

Huali said it exports PSM materials and packaging products to more than thirty countries. Sales have been growing at a compound growth rate of 50 percent and higher in the past few years.

Shanghai-based DT Capital, which manages more than US$500 million in US dollar and RMB funds, said China has a greater need to develop biodegradable plastics than developed markets.

"It's difficult to predict the payback period," managing director Zhao Jun said, "but the market prospects are looking good. Huali is the leader of the industry."

Previous news reports show that Huali posted 86 million yuan (US$12.6 million) in 2008 sales and 17 million yuan (US$ 2.5 million) in net profit.

Huali's first experience with venture capital investment dates back three years, when it received $US$5 million from a Hong Kong-based firm.

Huali is not the only bioplastic firm that's gaining popularity from the investment community. According to the 21 Century Business Herald, last year, Tianjin Green BioScience Co. Ltd. received US$20 million from investors including DSM. Also, Shenzhen Ecomann Biotechnology Co. Ltd. obtained investment from Shenzhen Capital Group Co. Ltd.

A trade group official said at an industry conference that among the 200-plus bioplastic companies in China, only 20 percent make profits. "Most of them are still in the early stage of investment," Weng Yunxuan of the China Plastics Processing Industry Association was quoted as saying in news reports.